When the Euro Disintegrates
By Dan Denning
May 13th, 2010
Last week’s right hook to markets with the Rudd Resource Rent Tax (RRRT) was followed up yesterday with a stiff left lawsuit jab to the jaw of Australian banks. “Shares in major banks including Commonwealth Bank and ANZ fell by about 1 per cent after BusinessDay reported they faced one of Australia’s biggest class actions for overcharging on penalty and late fees,” reports Eric Johnston in the Age.
Thus, in a matter of ten days, seven of the ASX/200’s ten largest companies by weighting has had a huge cloud of uncertainty descend on their future earnings prospects. For the materials company (BHP Billiton), it’s the RRRT. For the banks, the $400 million claim against them amounts to 1% of profits, according to Goldman Sachs analyst Ben Koo.